Wells Fargo shares weaken on regulatory friction

Wells Fargo & Co. fell 5% on Wednesday following analyst comments on a Bloomberg report that said bank regulators remain unsatisfied with steps the bank has taken to strengthen internal controls and compensate victims of auto insurance and mortgage rate locks. The bank has been working to satisfy the Federal Reserve's 2018 order to keep its assets below $1.95 trillion until it boosts governance and risk controls in the wake of its sales practices. Bloomberg reported on Tuesday that the Office of the Comptroller of the Currency and the Consumer Financial Protection Bureau are weighing more potential sanctions. J.P. Morgan analyst Vivek Juneja said Wednesday that Wells Fargo stock, "does not reflect any potential for further regulatory issues or delays...and hence any possibility of fallout from the OCC and CFPB's concerns would impact the stock." Any sizeable fine would reduce share buybacks, especially if the bank has to boost its operational risk capital, he said. Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news.

Wells Fargo shares weaken on regulatory friction
Wells Fargo & Co. fell 5% on Wednesday following analyst comments on a Bloomberg report that said bank regulators remain unsatisfied with steps the bank has taken to strengthen internal controls and compensate victims of auto insurance and mortgage rate locks. The bank has been working to satisfy the Federal Reserve's 2018 order to keep its assets below $1.95 trillion until it boosts governance and risk controls in the wake of its sales practices. Bloomberg reported on Tuesday that the Office of the Comptroller of the Currency and the Consumer Financial Protection Bureau are weighing more potential sanctions. J.P. Morgan analyst Vivek Juneja said Wednesday that Wells Fargo stock, "does not reflect any potential for further regulatory issues or delays...and hence any possibility of fallout from the OCC and CFPB's concerns would impact the stock." Any sizeable fine would reduce share buybacks, especially if the bank has to boost its operational risk capital, he said. Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news.